General Electric will set up more joint ventures in China as the
company tries to localize production here and seek sourcing
partners to offset rising costs of steel and copper, a senior
company official said yesterday in Shanghai.
The move will help GE sustain growth in China - especially its
infrastructure division that makes aircraft engines, locomotives,
power generators and water treatment equipment - at a double-digit
rate over the next few years.
The company's goal is to reach US$10 billion in sales in China
by 2010.
"We are looking to localize more products and capacities, seek
more creative partners here and prepare for more technology
transfers at the right time," said John Rice, vice chairman of GE
and chief executive officer of GE Infrastructure, its largest
business segment, at a media round table.
The solution to rising costs also included optimized designs to
achieve a "best cost" and GE has started to establish strategic
sourcing partner relations on a long-term basis.
But there's no unified standards for partners to form JVs in
China as it will vary from case to case, Rice added.
Currently GE, the world's biggest maker of power plant turbines
and jet engines, has more than 50 companies in China. Of them, 23
are joint ventures but it is unknown whether GE has a majority
stake in most of the JVs.
The search for local partners in China will also involve
acquisitions as the company plans to make US$1 billion in deals
during the next three to four years, according to a Bloomberg
News report, citing Steve Bertamini, CEO of GE China.
GE CEO Jeff Immelt has set a target last year for US$10 billion
in revenue from China and reiterated the goal this year even after
GE sold its plastic division, which accounted for a substantial
part of its sales in the country, to Saudi Basic Industries Corp
this year.
(Shanghai Daily October 23, 2007)
